Investment incentives are as follow:

• Investment incentives by business sector:
  1. Using high and modern technology, scientific research, research and development, using the innovation, environmental friendly, and efficient use of natural resources and energy;
  2. Clean agriculture, toxic-free agriculture, seed production, animal breeding, industrial crops and plants plantation, forestry development, environment and biodiversity protection, activities promoting rural development and poverty reduction;
  3. Environmentally friendly agro-processing industry, handicraft industry specializing in national traditional and uniquely handicrafts;
  4. Development of environmentally friendly and sustainable ecotourism, cultural and historical tourism industry;
  5. Education, physical sports , human resource development and skills labor development, vocational training institution or center, production of educational and sports equipment;
  6. Development of modern hospitals, pharmaceutical and medical equipment factory, traditional medicine production and treatment;
  7. Investment in, service provision for and development of public infrastructure solving urban traffic congestion and over populated residential area issues; development of infrastructure supporting agriculture and industry, cargo transportation, transit and international linkage services;
  8. Policy banks and micro-finance institutions focusing on poverty reduction and community with limited access to finance;
  9. Modern commercial centers promoting domestic products and world-renowned brands, exhibition centers and fairs for domestic industrial, handicrafts and agricultural products.
• Incentives by zone

Incentives by zone are divided into three zones:

• Profit tax incentives exemption for each business sector and zone
Zone Profit tax exemption Profit tax exemption with additional
Zone 1 10 years 5 years (Clean agriculture, toxic-free agriculture;    agro-processing industry; Education and Health)
Zone 2 4 years 3 years (Clean agriculture, toxic-free agriculture;    agro-processing industry; Education and Health)
Zone 3 Shall comply with the specific regulations
• Customs Duty and Value-Added Tax Incentives

In addition to profit tax incentives, investors in the Lao PDR shall receive incentives on customs duty and value-added as follows:

  1. Import of materials and equipment, which cannot be supplied or produced in Lao PDR, to form the company’s fixed assets and import of machinery and vehicles directly used for production will receive exemption for duty and value-added tax; while import of fuel, gas, lubricant, vehicles for administrative purposes and other materials shall comply with relevant laws; Temporary import of machinery and vehicles directly used for production shall comply with relevant Laws.
  2. Import of raw materials, minerals, equipment and parts to be used in the production for export will receive exemption for duty and value-added tax; In case that products are not export must pay duty and tax shall comply with relevant Laws;
  3. Use of domestic raw materials, equipment and parts to be used in the production as finished and semi-finished products for export will receive value-added tax exemption.

The Government defines the list of semi-finished products for export.

• Exemption of rental and concession royalty of state land
Zone Profit tax exemption Profit tax exemption with additional
Zone 1 10 years 5 years (Clean agriculture, toxic-free agriculture;    agro-processing industry; Education and Health)
Zone 2 5 years 3 years (Clean agriculture, toxic-free agriculture;    agro-processing industry; Education and Health)
Zone 3 Shall comply with the specific regulations